THE Private Sector Commission (PSC) has said it is alarmed to learn that the State Assets Recovery Unit (SARU) is involved in money laundering investigations of a major financial institution, as per a newspaper reporter. The Kaieteur News reported on the matter on Wednesday, a claim which the Republic Bank has denied.“It is our understanding that the mandate of the Unit is to investigate and recover assets belonging to the state. We are also aware that this unit is operating outside of any known laws in Guyana. The PSC is only aware of the role of the Financial Intelligence Unit, the Special Organised Crime Unit, and the Bank of Guyana in anti-money laundering investigations,” the business umbrella body has said in a statement.

PSC is calling for a clarification on why SARU, and not SOCU or the FIU, is involved in such an investigation. In addition, the body says it seems clear that the damage being done to one of the foremost banking institutions in Guyana by such an unsubstantiated release could lead to erosion of foreign and local investor confidence.

“This could be damaging to our economy,” the PSC added.

On Tuesday, Republic Bank (Guyana) Limited (RBC), as well as the Bank of Guyana, rejected the assertion that it is engaged in money-laundering activities. Republic Bank, in a statement, said it has a rich history of integrity spanning over 175 years, and views any suggestion of this nature to be malicious, libellous and unfounded.

“In particular, the Bank denies that any deposit of cash or cash equivalents was made to the referenced account by the named party on June 16, 2011 or (on) any other date. In light of the article, which seeks to tarnish the Bank’s reputation and question its adherence to sound banking principles, Republic Bank (Guyana) Limited will take all necessary steps, including reviewing legal options, to address these false allegations (in order) to protect its reputation and the interests of all stakeholders,” the statement added.

The Bank of Guyana (BoG) also responded to the article, captioned “SARU probes local Bank accused of money laundering.” The Central Bank said the article suggested wrongdoing by Republic Bank (Guyana) Limited and inaction on its part.

“One of the functions of the Bank of Guyana is to supervise and regulate financial institutions in Guyana, and it is against this background that this press release is being issued.

“The Bank wishes to advise that, subsequent to the receipt of a letter of complaint and request for prosecution of the financial institution, the Bank conducted an examination of the relevant records of the financial institution. Based on the documents and records examined by the Bank of Guyana, no evidence of wrongdoing on the part of Republic Bank (Guyana) Limited was found.”

According to the Bank of Guyana, the examination revealed that the financial institution had taken steps to ensure compliance with the relevant Prudential Supervision Guidelines issued by the Bank of Guyana under the Financial Institutions Act No 1 of 1995.

In light of the recent article, which has the potential to destabilise the financial sector, the Bank of Guyana says, it has found it necessary to issue this press release for the guidance of all parties.